S&P 500® Index Options - PM-Settled (SPXPM) www.cboe.com/SPXPM

SPXPM

SPXpmSM Options

To complement CBOE's flagship SPX contract, which features AM settlement, CBOE also offers S&P 500 Index options with PM settlement. SPXpm options can be used by investors with end-of-day reporting needs, as well as those who wish to trade in and out of positions on Expiration Friday. In addition, SPXpm options trade on CBOE's Hybrid Trading System, allowing investors to choose electronic or open-outcry trading.

Beginning on Thursday, October 1, 2015, the trading hours for options on SPXpm begin at 2:00 a.m. Central time (Chicago time). Please visit the Extended Trading Hours webpage for more details.

SPXpm Transitioned from C2 to Hybrid Trading on CBOE

In February 2013 CBOE Holdings transitioned its SPXpm product from its all-electronic C2 Options Exchange (C2) to Chicago Board Options Exchange (CBOE), where it is traded on CBOE's hybrid trading model, which incorporates both electronic and open outcry trading. The migration of SPXpm from C2 to CBOE is designed with the goal of increased access and liquidity by exposing the product to an even broader user base and simplifying spread trading. CBOE's flagship SPX option, which is a.m.-settled, will continue to trade in CBOE's open outcry environment under ticker "SPX."

Key features of SPXpm options include:

ELECTRONIC ACCESS

Point-and-click access available

LARGE CONTRACT SIZE

100 multiplier and a large notional size

Contract size is ten times larger than SPY (SPDR ETF) options making it more cost effective

PM-SETTLEMENT

Aligns with single-stock options and ETF options

Preferred by many investors including those with end-of-day reporting needs

The ability to trade in and out of positions on settlement day

CASH-SETTLEMENT, EUROPEAN-STYLE EXERCISE

Like SPX and most other index options, and unlike SPY and other ETF options

No risk of early assignment and loss of dividends, no portfolio disruption on assignment

CBOE Circulars (RG99-09 and RG00-171) allow SPX options to be written on a "covered" basis against SPY or IVV ETF shares in a margin account, provided the investor's brokerage firm has such policies in place

Margin

CBOE Regulatory Circular RG15-183 notes that CBOE rules allow a short position in a cash-settled-index option established and carried in a margin account to receive covered margin treatment, if the short option position is offset in the same account by an equivalent position in an index-tracking ETF that is based on the same index that underlies the short option(s).

In order to receive covered margin treatment, the market value of the offsetting ETF position must be equivalent or exceed the current aggregate index value of the option being covered. One should note that not all ETFs are managed so as to maintain a share price that is a constant fraction (e.g., 1/10 th, 1/100 th, 1/1,000 th, etc.) of the index being tracked.

TAX TREATMENT

Under section 1256 of the Tax Code, profit and loss on transactions in certain exchange-traded options, including SPX and SPXpm, are entitled to be taxed at a rate equal to 60% long-term and 40% short-term capital gain or loss, provided that the investor involved and the strategy employed satisfy the criteria of the Tax Code*

Expiring SPXpm Options Cease Trading at 4:00 p.m. Eastern Time on Their Last Day of Trading

* In the case of a holiday on the settlement date, the settlement date is moved back one business day (e.g. from Friday to Thursday). In addition, no SPX Weekly or Wednesday Weekly will be listed that would have an expiration date that coincides with the expiration date of a traditional SPX option or EOM option.